MINNESOTA RETIREMENT PLAN STATE MANDATE: HELP BUSINESS OWNERS BENEFIT
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Minnesota Secure Choice is a state-sponsored retirement savings program designed to help private-sector workers in Minnesota save for their retirement. This program is particularly targeted at employees who do not have access to an employer-sponsored retirement plan, such as a 401(k). The initiative aims to address the retirement savings gap and ensure that more workers have the means to build a secure financial future.
Please note that specific details and features of Minnesota Secure Choice may vary, and it’s advisable to refer to official resources or consult with a retirement plan professional for the most current and comprehensive information.
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Contact your Regional Plan Consultant
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What You Should Know
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Deadline:
Number of employees at covered employer Implementation Timeline 100 or more June 30, 2026 50 to 99 Dec. 31, 2026 25 to 49 June 30, 2027 10 to 24 Dec. 31, 2027 5 to 9 June 30, 2028 -
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Requirements:
- Employers with 5 or more employees who do not offer a qualified retirement plan (such as a 401(k), SIMPLE IRA, or SEP) must enroll in the program.
- Applies even if employees live outside Minnesota.
- Employers cannot opt out unless they already offer a qualifying plan.
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Penalties for Non-Compliance:
- Months 1-6: Enrollment-window reminders
- Months 7-18: Written noncompliance notices
- Months 19-24: Contact plus 2 certified letters
- After month 24: $100 per employee, maximum $4,000
- Months 25-36: $200 per employee, maximum $6,000
- Months 37-48: $300 per employee, no maximum
- Each ongoing year: $500 per employee, no maximum
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Minnesota Secure Choice OR Customized Plan?
Minnesota Secure Choice is a basic, one-size-fits-all retirement savings program for businesses that do not wish to sponsor a plan for their own employees. Yet there are many businesses that would be better served with a plan from TRA that’s customized to their needs.
| Minnesota Secure Choice | Custom 401(k) from TRA | |
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| Pre- and Post-Tax Deferrals | Roth IRA w/ auto after-tax payroll deduction | Pre-tax or Roth elective deferral contributions |
| Contributions | Auto-enrolled at a 5% contribution rate | Lesser of 100% of compensation or $24,500 |
| Catch-Up Contributions | Determined by Roth IRA contribution limits – $1,100 (over 50) | $8,000 annually for those age 50 and older |
| Employer Match | Not permitted | Available |
| Income Limit | Employees are responsible for determining if they meet income limits and are not eligible to contribute to Roth IRA accounts. | No income limits |
| Investment Choices | Limited | Can provide a wide variety from top asset managers |
| Automated Payroll Integration | Available | Available |
| Customizable for businesses | Not customizable | Yes – for example, Safe Harbor, SIMPLE, Profit-Sharing & Cash Balance |
| Tax Credit | Available | Yes – 100% of the expenses paid up to the greater of $500 or the lesser of $250 for each non-HCE’s. A maximum tax credit of $5,000 per year would be available for 3 years. |
TRA Plans to Consider
For Minnesota Secure Choice businesses who want to sponsor a retirement plan, some plans to consider include:
• 401(k)
• Safe Harbor 401(k)
• Cross Tested Profit-Sharing Allocation
• 401(k) plus Cash Balance Plan
Other alternatives to Minnesota Secure Choice include SIMPLE 401(k) Plans, Group 401(k) Plans (MEPs, PEPs and Aggregation Programs), and 403(b) Plans (for non-profits).
Working closely with you, TRA will create a customized plan that meets your client’s business. We partner with top recordkeepers and investment managers around the country and deliver exceptional client service. We also offer 3(16) Fiduciary Services to relieve business owners of day-to-day plan administration responsibilities and manage their fiduciary risk.
Complete the form below and one of TRA’s Regional Plan Consultants will be in contact with you.
